US pre-open: Futures point to early gains as Powell heads to House of Representatives

Wall Street futures were in the green ahead of the bell on Wednesday as investors awaited the outcome of this week's House vote on Joe Biden's stimulus package.

As of 1230 GMT, Dow Jones and S&P 500 futures had the indices opening 0.15% and 0.28% higher, respectively, while Nasdaq-100 futures were 0.30% firmer.

The Dow Jones closed 15.66 points higher on Tuesday, narrowly extending modest gains in what was a mixed session for major indices after Federal Reserve chairman Jerome Powell told the Senate Banking Committee that inflation was still "soft" and stated the US economy was "a long way" from its goals for both employment and inflation goals.

Powell's testimony on Capitol Hill will continue on Wednesday, with the Fed head now addressing the House of Representatives Financial Services Committee.

IG's Joshua Mahony said: "Yesterday's rebound for US stocks failed to extend to tech stocks, with that Nasdaq underperformance leading to a similar downward move for Asian tech names overnight.

"Jerome Powell did his best to allay fears over a potential tightening phase for monetary policy, with the governor stating that we remain some way from seeing the kind of inflation and employment conditions required to start that journey to higher rates."

Biden's Covid-19 stimulus plan was also in focus early on Wednesday, with the Democrat-led House likely to approve the stimulus package before the President looks to push the full package through the Senate.

On the macro front, mortgage applications fell 11.4% in the week ended 19 February, according to the Mortgage Bankers Association, as higher mortgage rates weighed on demand.

The MBA's Joel Kan said: "Mortgage rates have increased in six of the last eight weeks, with the benchmark 30-year fixed-rate last week climbing above 3% to its highest level since September 2020.

"As a result of these higher rates, overall refinance activity fell 11% to its lowest level since December 2020, but remained 50% higher than a year ago.”

Still to come, new home sales data for January will be published at 1500 GMT, while Federal Reserve heads Lael Brainard and Richard Clarida will both deliver comments throughout the course of the day.

In the corporate space, Tesla shares were in the green prior to the open after word broke that Ark Invest's Cathie Wood raised her stake in the firm by more than $120.0m during Tuesday's selloff.

Hostess Brands, L Brands, Nvidia and Forterra will all post quarterly earnings after the close.